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International investors lap up €2.5bn Irish syndicated bond issue

Ireland on Tuesday unveiled its maiden syndicated bond offering since the indebted country’s €67.5bn rescue by the European Union and International Monetary Fund in 2010, with the €2.5bn, five-year issue getting oversubscribed three times.

Amid emerging signs of an economic recovery in the Republic, over 200 institutional investors scrambled for the bonds, with non-Irish lenders accounting for 87% of the debt, Ireland’s National Treasury Management Agency said.

The overwhelming demand for its bond issue enabled Dublin to raise €500m more than originally scheduled, and that too, at a lower-than-expected interest rate of 3.316% - down from the effective 5.2% Ireland had to pay for similar securities last July. Barclays advised Dublin on the fundraising.

Separately, the European Stability Mechanism, the eurozone's long-term bailout fund, on Tuesday sold €1.927bn of treasury bills, receiving solid demand in its first short-term debt auction. The new ESM bills, which had a bid-to-cover ratio of 3.2, offered an average yield of minus 0.0324%, Bundesbank said.

Earlier in the day, Japanese finance minister Taro Aso said that his government planned to buy “some ESM bonds” using its foreign exchange reserves, as it “monitors progress in efforts to stabilise the European situation". Japan has been an active investor in the single-currency bloc’s temporary rescue fund, the European Financial Stability Facility, since the EFSF’s first bond sale two years ago.

Meanwhile, official figures released on Tuesday by Eurostat showed that the unemployment rate in the eurozone rose to a new high of 11.8% in November, with the number of jobless workers in the struggling 17-member bloc increasing to 18.8 million. Across the wider EU, the unemployment rate remained at 10.7%, the same as in October, but up from 10% a year ago, it emerged.

The news came as Ireland's deputy prime minister, Eamon Gilmore, warned that the UK’s potential exit from the EU is now the "big” political “challenge" facing the continent.